Kasikorn Bank (or KBank), a major banking group in Thailand established as long ago as in 1945, announced the launch of its new Letters of Guarantee processing platform powered by the blockchain technology jointly developed in partnership with IBM. The bank reported that by next year 1 in 20 Letters of Guarantee for corporate businesses will be processed through the distributed ledger system of the bank.

KBank has been cooperating with IBM since last November, when the two companies decided to establish a blockchain-based business channel to enable loan recipients, credit receivers and the bank to track in real-time the banking processes that previously used to take much time.

As it is known, the new distributed ledger platform has been developed on the basis of Hyperledger Fabric and has been piloted within the Bank of Thailand’s regulatory framework. The blockchain environment so developed may be expanded to cope with the potential surge in Letters of Guarantee issuance in the electronic format.

According to the available forecasts, the number of Letters of Guarantee issued in the commercial banking environment of Thailand is estimated to exceed $40 billion, 7% up in 2017. About $9 billion of that figure will be issued by KBank, holding the major share (25%) of the market. Meantime, KBank plans to build up the electronic issuance of Letters of Guarantee to reach 35% by late 2018, and 5% of those will be processed through the distributed ledger ecosystem. Besides, the bank plans to attract other players in the industry to join the blockchain initiative.